haidi: i'm haidi stroud-watts in sydney.

annabelle: i'm annabelle droulers in hong kong. we are counting down to the asian major market open. shery: i'm shery ahn. big tech leads u.s. stock declines while bond yields rise on the feds's hawkish hold. policymakers seeing another hike this year. and higher rates through 2025. >> it is a primary objective and i did not say otherwise. it is what we have been trying to achieve for all this time. >> a new offer to striking autoworkers even as gm cause the. >> alan joyce had to lose some departure payout fixing an acute loss of trust among customers. but how u.s. futures are coming online in the asian session after u.s. stocks and bonds fill in the new york session. we saw a lot of fluctuation. we had the fed rate decision today as expected. a hold.

we are now expecting another rate hike this year not to mention higher rates throughout 2025. we saw treasury yields rising across the board. the two year yield at the highest level since 2006. the 10 year yield at the highest level since 2007. they are pressuring tech with the nasdaq 100 underperforming. all of that sentiment is being translated into oil prices falling below the $90 per barrel. we saw the huge rally around 30% since june. those inflation concerns kicking in. today data showed a smaller than expected drop in u.s. crude supply. that did not necessarily help. in the asian session we continue to see decline in asia below $90 per barrel. of course, the first rate decision after the fed came from brazil. as expected, it was another cut of 50 basis points to 12.75%. this is a massive cut, the

second straight meeting where they have a 50 basis point cut. brazil has really let -- lead the way in tightening and easing as well. now, the expectation is this was a unanimous decision to cut and the central bank is saying we might even see another rate cut of this magnitude again. so, we are in the easing cycle in brazil. it's not the only country. a look at these countries in south america that have already cut like chile and peru as well. the big story today was all to do with what is happening with the fed and where they go from here. because, the expectation, yes, was for a hold today. what happens next? the debate might be on for their next meeting in november. and in december. this is what chair powell had to say. chair powell: we are prepared to raise rates further if appropriate. we intend to hold policy got a restrictive level until we are confident that inflation is moving down sustainably towards

our objective. haidi: this comes amid hot debate over what kind of landing. soft landing, hard landing. particularly as we are getting this backdrop of escalating energy costs and oil prices. take a look at what fed chair powell had to say about whether this is still the end goal here. chair powell: the soft landing is a primary objective and i did not say otherwise. i mean, that is what we have been trying to achieve for all this time. the real point is the worst thing we can do is to fail to restore price stability. the record is clear on that. shery: joining us is the former atlanta fed resident dennis p lockhart. it's great to have you with us. but your reaction to what you heard today. dennis: well, i think the

committee is feeling its way along now. it is in a phase where, although, it penciled in another rate increase, it may not follow through with that. it depends on entirely -- depends entirely on how the data evolve and how they assess the situation in the coming weeks through year end. i also took away they are signaling in their projections a higher for longer period. they have basically shaved 50 basis points off the year end lower rate than they had protected -- projected in june. that i think is meaningful. i thought german power was -- chairman powell walked the tightrope. he did not provide any firm guidance. he really come as i said, suggested they are just feeling their way along deciding what is the appropriate stance of

policy. shery: this higher for longer as the dot plot suggests, what does it mean for the economy? dennis: that the interest rate level will remain higher into 2024 than earlier projected. and, if there are cuts made, in all likelihood, just based upon these projections, which can be revised again two or three times, but based on these projections, that, if there are cuts likely to be in the back half of 2024, and possibly, just in the fourth quarter of 2024. haidi: it is interesting listening to chair powell, the realization of how complicated the territory being navigated at the moment. he said earlier a soft landing is still the primary objective. he said it's not the baseline expectation. how do uss -- you assess the

likelihood a soft landing or a no landing can be achieved from here on? dennis: right now you have a reasonably encouraging set of conditions. you do have a gradual disinflation occurring while the economy is apparently growing at a very strong pace. well above trend. it looks like we will see that momentum fall into the fourth quarter of this year. and, the employment markets are rebalancing. there is a lot, i think, that they would view as a favorable circumstances that suggested that if they are patient enough with the disinflationary trend, they can actually do it without a lot of damage to employment. shery: is the disinflationary trend at risk to you? it seems like it is not the sticky inflation we have been seeing, but perhaps, new drivers of inflation, commodities inflation, energy markets.

we are watching the labor market organization, strikes we are seeing as well to chile adding to wage inflation. dennis: i think there is undesirable upside inflation risk meaning that we could see either a very sticky inflation, that simply does not move for some time, or even, inflation researching in some respects -- resurgi inn some respects. i am keeping my eye on energy prices, not justg headline of gasoline prices, but how energy prices actually course through the economy in the coming weeks and months because even though there is a separation of energy and food in order to get a core measure of inflation, the reality is there are energy prices in almost all goods and

many services. they are perhaps yet to be reflected in price pressures. shery: higher energy prices just mean an additional tax when it comes to household, consumers. how long can we expect the american consumers to remain healthy when they are already eating into their savings from the pandemic? dennis: one factor i think is important is it that most households have employment. almost everyone in the united states that wants a job has a job or has good prospects of getting a job. very soon. that breeds confidence in the consumer and a willingness to spend. to some degree, even when the savings are being spent down. so, as long as we have these very favorable employment circumstances i think the consumer will remain active. there may be trading down in terms of the price or quality of

goods people buy. but on balance, the spending will continue, i believe. haidi: more questions about the resilience of the chinese consumer and chinese household. to what extent is the chinese slow down and the ability of policymakers there to get recovery back on track a wild card for global economies including what the fed would be thinking? dennis: i think in a very linear sense the chinese slowdown would probably not have a tremendous effect on the u.s. economy. but, in combination with other things that could happen, some of the other contingencies, it could just add to a collection of headwinds that could really have some impact on the u.s. economy. now, of course, at this stage, the fed would like to see some slowdown, i think. just in order to help with the inflation task.

but, obviously, we would like to avoid a recession. i do not think china can purchase -- precipitate a recession in the united states. the two economies are not that directly linked. but i do think it could have -- add to adverse conditions. shery: i know haidi mentioned it slightly earlier, but talking about strikes from the auto sector, hollywood writers, even canada's auto sector facing the threat of strikes. what does it mean when we have bargaining power returning to the worker? could this really lead to potential wage pressures down the line? when does that become a concern? dennis: it is interesting. we are in a new era of strikes. we have not seen strikes of this magnitude for some time. now we have come as you refer to, the auto strike and also the screenwriters and actors are

also honoring that stark as well. -- strike as well. it suggests to me that the power has shifted to labor from capital. that is a fairly dramatic and profound almost structural shift. at the same time, inflation pressures have made union members much more concerned about their cost of living. those are two major factors at work i think. and so, down the line, if inflation remains high or at current levels, and, real incomes are affected badly, then, you will probably see more labor action. haidi: dennis, always great to have you with us. dennis p lockhart there the former atlanta fed president. thank you for your time.

let's get to the start of trading. a sort of measured reaction in the u.s. session. how is asia looking? annabelle: sort of the same thing developing here. when you look for instance at moves in the dollar we saw an initial spike following the fed decision of about .4% for the greenback on the bloomberg dollar gauge. after that we have seen that dissipate through the session. we are in that early hours now for asian fx trading, fairly steady. a couple currencies to node. the japanese yen is above the 148 level. it is ahead of the boj meeting tomorrow. that is one shaping up to be a wildcard decision, what they will sit no in terms of the exit or possible exit away from negative rates. then keeping an eye on indicative pricing for the brazilian riau. we had brazil with the first central bank to make its decision post the fed cutting the benchmark lending rate by 50 basis points to 12.75%.

again indicative pricing fairly steady going. watching the pound. we have seen weakness coming through trending lower. the boe decision is also coming up thursday. very heavy central-bank action focus again. it's really coming down to a knife's edge given the economic signals show what is shaping up to be rapid deterioration. as you said, i did early moments, not seeing a lot of direction. let's see if we are getting moves on equity futures counting down to the open for sydney, soul, and tokyo. you can see weakness starting to come through particularly for the aussie market. a couple stocks we are watching include qantas. given the headlines there. the questions over how much remit eurasian the outgoing ceo alan joyce will receive. that focus is on broad weakness ahead of the session today. shery: ahead, more on the market reaction to the fed signal of another hike this year.

we will speak with the director of research at carnegie investment council later this hour. first, stellantis makes striking autoworkers a new offer as the gm shutdown says they can't afford to meet demand. this is bloomberg.

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shery: take a look at some of the -- take a look at some of the big moves in the session today. we were following just a day after going public instacart. because shares dropped as much as 11%. to trade below the company's initial public offering price. it ended at $38 per share. look at l;aviyo, a marketing technology firm that begin trading today in new york and rose 9.2% at the close. we are following fedex. it's usually a barometer of global growth given their business. it rose in late trade on a bullish outlook. we are talking profits topping analyst estimates. they raised their earnings forecast thanks to cost-cutting,

strong pricing, and customer switching to the company. haidi: we are watching oil driller ada-es holding attracting nearly $77 billion in orders for its $1.2 billion ipo, a subscription rate of over 60 times. the offer was priced at four dollars per share. the top of the range took the firm's value to just over $4 billion. in the ipo is saudi arabia's biggest this year. shery: the latest on the u.s. autoworkers strike. the union at stellantis made a new contract offer. officials at general motors insist uaw's demands remain too high. su keenan joins us with the latest. the union has been pushing for a wage increase of 36%. su: that is way too high for gm and they are not accepting that their offer was rejected five days ago. but stellantis, the maker of the

jeeps and chrysler models has made a new contract offer. uaw is not sharing the details of the proposal but they say they are reviewing it. this united autoworkers labor action has already made history in striking against numerous automakers. now for the first time 190 uaw workers struck a zf plant in tuscaloosa, alabama that provides axles for mercedes-benz vehicles. while uaw represents various supply plans, these workers declared their own strike. there is momentum building here. stellantis said it will temporarily lay off 68 employees at its ohio machining plant as a result of the strikes. gm has also idled an assembly plant in fairfax, kansas. that uaw president has said more plans face walkouts if gm, ford, and stellantis do not sweeten

their offers. the union is continuing to put pressure by first striking at non-eason jewel plans and then upping the ante on -- nonessential plants and then upping the ante as the days go on. that seems to be part of the strategy. shery: -- haidi: when you look at recent comments how far apart are gm the union? su: there was an op-ed in the local detroit paper from a executive: the uaw request -- calling the uaw request untenable and mary barra in a staff webcast wednesday to the nonunion salaried staff said the union's demands were too costly. she also thought the offer she made of 150,000 per year annual average compensation was fair. and, compared the $67 per hour labor cost to $45 per hour at

tesla. she told her staff that if the union accepted their offer the company could grow. again, gm, the ceo seeming frustrated again in her remarks. yet, they continue to negotiate. which is a sign of progress. a deal has remained elusive, though, after several days. haidi: su keenan as we continue to watch the negotiations. in terms of labor issues, we are also watching another looming worker walk out this time in india. ahead of its holiday season. coal india, the world's biggest producer is facing a three-day strike from october fifth. workers affiliated with five national trade unions voted for action over a wage dispute. cold india produces almost 2 million tons of coal each day powering 17% of india's electricity needs. power demand usually increases ahead of the month-long hindu

festive season. get a roundup of the stores you need to get your day going on today's edition of daybreak. terminal subscribers can get that at dayb . you can customize the settings so you just get the news on the industries and assets you care about. this is bloomberg.

♪ haidi: qantas make clawback two thirds of former ceo alan joyce is payout after a string of controversies hit the airline towards the end of his 15 years in charge. this came with the annual report that dropped quite unexpectedly yesterday. what is this measure that is a bit of an olive branch? >> we will get to that. the way the news was developed that delivered at the moment. there are a couple bonuses at

stake. in u.s. dollars $5.4 million. that can be clawed back at the discretion of qantas. as to if they will actually do it, though. the short-term bonus 1.4 million u.s. dollars will not be paid until the consumer watchdog complaint over the so-called ghost flight scandal is settled related to qantas selling tickets it had -- for flights it had already canceled. that has been reduced by .5 million dollars due to customer satisfaction. on top of this after alan joyce's departure we heard from the high court that qantas may face hundreds of millions in compensation payment for that 700 workers they fired during the pandemic. the chairman addressed this. he says the company is experiencing a loss of trust from the community. and of the board of management is determined to fix that. shery: paul, how much will this actually improve the pub look --

public image of qantas? paul: mid repair -- image repair takes time. they might clawback the bonus of the department ceo. will that be enough? you mentioned it the way the news was delivered. it was in the annual report that got released at 3:00 p.m. yesterday afternoon. the national broadcaster the abc said the annual report arrived without warning at 3:00 p.m.. that does not give evening news bulletins a huge amount of time to prepare or gather reaction either. that's a well-known tactic amid media relations in terms of timing your release. so, they aren't doing a good deal to improve goodwill either. also the board was there during the ghost flight fiasco. it was there when the workers were sacked illegally. and through it all it offered extensive support to alan joyce as well. so we have the australian treasurer weighing in saying

qantas has a lot of work to do to regain trust. one suspects perhaps we have not seen the end of the saga yet. shery: paul allen in sydney with the latest on qantas. next, arno -- carnegie investment counsel director of research joins us to talk market strategy as the fed confirms the higher for longer narrative. this is bloomberg.

>> we are prepared to raise rates further if appropriate. we intended to hold policy at a restrictive level until we are confident inflation is moving down sustainably towards our objective.

a soft landing as a primary objective and i did not say otherwise. the committee decided at today's meeting to maintain the target range for the federal funds rate at 5.25%-5.5%. the savings rate for consumers has come down a lot. it could be for other reasons. the usual rate of interest is higher for various reasons. we raised our policy interest rate by 5.2 five percentage points and we have continued to reduce securities holdings at a brisk pace. we have covered a lot of ground in the full effects of our tightening have yet to be felt. haidi: that was fed chair jerome powell. joining us is gregory halter the director of research at carnegie investment counsel. there is a sends out the fed, like with everyone else, just feeling their way through this with a lot of uncertainty now when it comes to the inflation outlook with the resurgence of prices. where does that leave investors

who want the certainty and the fed put, if you will? gregory: thank you for having me. i guess number one, the point i would make is investing is uncertain to start with so for folks out there looking for certainty, that is probably not going to happen. obviously, you would like to have a better path in terms of knowing where things are. but there are plenty of crosscurrents in the economy, not just the u.s., but globally. that will probably always be the case. you know, if it is not oil it might be student loan payments or this or that or the other. so, that is something we will always experience. haidi: where are you seeing opportunities given a lot of the hotspots we have seen in the rally so far this year it looked pretty stretched? gregory: yes, i would agree. some of the areas have been very

stretched. on the fixed income side we are looking to extend our duration our maturities at some point in the future. is up one month from now? two months, three months? it depends on the data and what the fed it does with rates. but, we are thinking that on the fixed income side we are probably closer to the peak. so at some point we will start to extend our maturities. on the equities side there are always gyrations in the stock market. always there are companies that fall for whatever reason. it might be fundamental. it might be all good rhythmic -- algorithmic trading. there are companies out there that have been able to pass through price and have been very successful. waste management companies. railroads are able to do that. trucking companies. even, uniform rental companies. so, there are opportunities out there. we do always look for macro

trends happening in the world. the u.s., certainly, but the world. we have seen re-shoring and near shoring. the infrastructure of the u.s. needs a lot of work. and there are companies out there that stand to benefit. shery: are you factoring in a possible government shutdown in the u.s. later this month? how would that affect markets? given that this is one of the most recurring events in american politics. gregory: great point. it seems to be recurring. it seems to be more political. i think the market has probably passed that by as being a critical event unless of course it is a sustained shutdown. i do not think it will happen. someway somehow they always seem to get things done. but again, it is the sustained shutdown if we had it that could cause some issues. one of the issues would be a

delay in data. the fed says data, data, data, always looking at the data. if they do not have it because it is not being produced or provided that could be a troubling event. haidi: labor issues if this continues, when do we start to see people fearing continued margin pressure in these businesses? perhaps, these issues spreading to other sectors not just auto? gregory: yeah, that's a good question. i mean, you would have to almost go company by company and even within the company is may depend on the product line. there is a breaking point for every company. every person. how much is too much in terms of price? at what point does the margin take a hit? that remains to be seen. i think it's very company specific. we can look at the snap

companies -- snack companies, soda companies. they have been able to get price because they have a brand name. they have pricing power. are you really going to give up your kitcat bar or your hershey bar if it goes up by $.10? but, there is a point. and as we heard, as we know, consumers hate the word inflation. it has a very negative connotation. despite that, they are still spending. but at some point, there is a breaking point. i do not know where that is great i think it is on a company by company basis. haidi: great to have you gregory halter director of research at carnegie investment counsel. new zealand will release second-quarter gdp in a few minutes. we will see of the country emerged from a mild recession. we know the prospects of further economic downturn are pretty likely at this point. we will bring you those numbers as they cross the bloomberg

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you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh shery: here is the latest in geopolitics. israeli prime minister benjamin netanyahu says a deal between israel and saudi arabia what advance peace with the palestinians. he made the comments in new york after meeting with president

biden. the three countries are in talks over a possible agreement that would see saudi arabia and israel establish formal ties. >> we can forge a historic peace between israel and saudi arabia. i think that such a piece would go a long way first to advance the end of the arab-israeli conflict and achieve reconciliation between the islamic world and the jewish state. an advantage -- advance genuine peace between israel and palestine. shery: president biden and his brazilian counterpart lula da silva announced an initiative to improve labor conditions in the country aiming to help workers address challenges like a transition to clean energy technology and forced labor. biden has taken steps to strengthen his ties to the labor unions as part of a 2024 white house dead. indian media attacks canadian prime minister justin trudeau's

claims new delhi was behind the murder of a sikh activist in the country. many called on trudeau to show evidence to back his claims. the accusations drove a wedge between india and canada with new delhi warning citizens to exercise the utmost caution in the country. taiwan's opposition presidential candidate is pitching himself as the best choice to lead the island as tensions with china worsen. he is pulling in third place ahead of elections in january. he is using his experience as a taiwan's as a taiwan's top law-enforcement official to boost his image to voters. speaking to bloomberg. this response -- responsibility

for the leader of taiwan. i think about former president and how he met xi jinping in 2015. if you are to become taiwan's president would you seek a meeting with xi jinping? >> the most important thing at this stage is we in taiwan first improve our own national defense armaments at our own self defense capabilities. of course, in the process of improvement, we will start with dialogue. with the current situation in taiwan, in fact, we still have a long way to go. scarlet: u.s. is concerned about taiwan's military. what's -- >> the situation is

completely different now. at this stage, taiwan is actually facing constant conflict. it is easy to spark a conflict accidentally. if therefore, under the current situation, the defense budget cannot be reduced. if you spend the budget it will only go up, not down. therefore, we need to continue to discuss with the united states how to improve taiwan's self-defense capabilities in which weapons and equipment are most suitable for taiwan in terms of the entire arms purchase. scarlet: when you increase the military budget will you commit to spending 3% of gdp on defense? >> in fact no matter how much gdp it is the most important thing is to make the structure of the national defense budget to meet the needs of all our operations. one day there may even be a chance to gradually increase it to 3% or above. of course, that is what should

be done. to protect life and property at any cost. with high gdp and a high defense budget this is not the issue. the issue is you have to use it in the right direction. it can really make the other party not dare to start a war easily. scarlet: you have made clear that as the future taiwan president your priorities are increasing taiwan's military preparedness and seeking dialogue negotiations with mainland china. how we balance the two? >> taiwan's leaders should always torment her -- remember one sentence. proper -- preparation for war is necessary but avoiding war is a leader's responsibility. when a democratic progressive party was in power it broke the delicate equilibrium in taiwan and brought the dynamic talents to the edge of conflict and the imminent outbreak of war. so, we have to initiate exchanges with mainland scholars, experts, and people. to stabilize for nongovernmental

exchanges and eventually moved to official forms of exchange. let the trust between each other continue to accumulate and increase again. let me tell you that it's impossible to return to mining joe's era short-term. scarlet: if tsmc were to announce they wanted to invest more in the u.s. what would your response be? >> semiconductors are the lifeblood of our technology industry in taiwan. we must allow the advanced analogies to stay in taiwan. technologies can be deployed globally. we have to enact national security laws to protect the core and critical technologies in semiconductors and prevent confidential information from being leaked. this is our responsibility. shery: that was that taiwanese presidential candidate speaking to carl fu in new york.

their scarlet fu in new york. in the asian session downside pressure after stocks and bonds fell. in the regular session you have the fed's caucasian skip leaving the rate unchanged as expected but signaling borrowing costs will likely stay higher for longer and having perhaps one more rate this year. you can see the nasdaq 100 futures underperforming. the same in the regular session with the nasdaq 100 falling. we were watching of course treasury yields that climbed across the board with the two year yield now at the highest level since 2006. haidi: yeah. we are watching new zealand for gdp numbers. it could be a little deceptive. yes, we are expecting to see the economy bouncing out of recession. .9% of the quarter on quarter seasonally adjusted numbers just crossing the bloomberg now beating expectations of .4%. coming back from the fall of .1% we saw in the first quarter. year on year the number is a bid

at 1.8 percent. the expectations from economists were 1.2% and extending the growth in the previous reading of 2.2 percent. according to bloomberg economics this is likely to just be a temporary rest fight. a lot of it will be contribution from the extreme weather we saw first quarter 2023 as the key drivers for the rebound. bloomberg economics expects we will see the resumption of contraction in the new zealand economy by the time we get to the third quarter with the increase of higher rates from the rbnz continuing to weigh on demand. they are expecting a slumping retail trade, weaker home sales, weakness in construction, all of this likely to fail to offset any strength we see in manufacturing and agricultural output. we are seeing a move when it comes to the kiwi dollar. we are expecting that to be a temporary boost as well to show that the economy is rebounding

in the latest readings. but given that we expect a resumption of contraction by the third quarter on account of the higher interest rates, it is unlikely that the strength we see in the kiwi, if any, will hold. shery: watch us live and see our past interviews on tv . dive into any of the securities on the bloomberg function that we talk about. become a part of the conversation by sending us instant messages during our shows. this is the terminal. subscribers only. check it out at dayb . this is bloomberg.

website about saying there'll be no hard choices. i am unequivocal that we will meet our international agreements including the critical policies in paris and glasgow to limit global warming to 1.5 degrees. shery: the u.k. prime minister rishi sunak speaking about his government screen agenda including pushing back a ban on new petrol powered car sales by five years to 2035. iceland is among the nations most exposed to extreme weather events with its world-famous

pleasures at risk of melting as global temperatures rise. the prime minister joined me from the u.n. general assembly to discuss her country's efforts to fight climate change and how rising tourism is putting the islands environment at risk. >> you can say that the first properly financed and realistic climate action plan was put into action in iceland in 2018. it was revised in 2020. we have been making very concrete steps ever sense my government took office at the end of the year of 2017. i think, however, we are still not doing enough. at the climate summit today i think it is very clear that all nations need to accelerate their climate action. we have done many things when it comes to, for example, renewable energy for heating and electricity. we are implementing an energy

shift in our transport system. we are subsidizing new green technologies. for better use of energy. also, to increase carbon binding. so, a lot is being done in iceland, but we need to do more and i think that can be said about the rest of the world too. shery: tourism is a pillar of your economy and it is putting a strange on the -- a strain on the environment. your economy is running pretty hot at the moment. how do you balance those goals? >> yeah, well, tourism has really grown exponentially in iceland in the last decade. that obviously is not just creating effects on the climate. it is also -- because, most of our guests coming to us are creating pressure. so, we have been and we are actually announcing we are

putting increased taxes on tourism in iceland. not high taxes to begin with, but, we are talking about city taxes, etc., for people that stay in iceland because we think it is very important that we have an economic factor within that. and a lot of our companies working in the tourism sector are finding ways to really turn over to a circular economy, two electric cars, etc.. the change is happening but it's a challenge. it's truly a challenge. shery: when it comes to women's rights madame prime minister our son has been a front-runner. you have a lot that requires companies to get certified for equal pay for equal work. how is this helping to achieve equality? >> well, you know, the gender pay gap is actually quite an

important factor of the gender gap in general. and we have been diminishing the gender pay gap in iceland gradually. and increased transparency through that legislation on equal pay has been an important factor. we are also taking new steps now. because, what remains of the gender pay gap in iceland it's really about the fact we have a under segregated labor market. some sectors are dominated by men. other sectors are dominated by women. the sectors dominated by women tend to be undervalued. that is what we are actually -- we created a task force to really tackle this challenge. we are in the middle of a pilot protest in the public service for how to change the value so we can actually start talking about pay equity, not just equal pay. but, you know, pay equity is so very important for the economic

independence of women. therefore, it's an important factor of gender equality in general. shery: how big of a sense of a threat is it for iceland russian invasion of ukraine? as a small country without a military amid this race for control of the arctic as well? >> we are members of nato and have been since 1949. we have a defense agreement with the u.s.. i think that what -- when you ask about the sense of security i think that what has happened is people realize how important multilateral cooperation is. and not least for a small country like iceland which has built its existence really on a the rule-based order that other countries follow the rules, do respect territorial integrity and sovereignty of other nations. so, i think absolutely what has happened in iceland is people

have become more aware of the importance of the multilateral system. being here at the you in general assembly -- united nations general assembly where we are talking very much about the fact the multilateral system is under threat now, that it is under pressure right now, we are seeing deepening divisions. i think iceland is actually using its voice very clearly to support that multilateral system that is so important, not least for the smaller countries of this world. haidi: iceland's prime minister there speaking earlier to shery ahn in new york. across sovereign bonds trading in the asian session, big moves when it comes to u.s. treasuries. one of the biggest market reactions at the moment, about the entire treasury curve nearing the highest of the cycle. the 20 year and a 30 year yield looked pretty close. the two year yield was more sensitive to eminent fed moves

hitting the highest since 2006 in reaction. the fed signaling interest rates will be higher for longer and holding that target range between 4.2 -- 5.25 percent-five .5%. across australia and new zealand we had pretty good data out of new zealand and little earlier. the second quarter gdp beat expectations. also, interestingly, the first quarter gdp was revised again to show the economy actually was not in recession. that has been revised to a flat reading now. coming up in the next hour, more analysis on the fed. this is bloomberg.

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♪ shery: you are watching daybreak: asia live from new york, sydney, and hong kong.